New rigosertib data to be presented next month should make investors feel more confident that Onconova has an active blood-cancer drug.

The past six weeks have not been kind to Onconova Therapeutics, as the chart above shows quite clearly. The company is expected to release top-line results from a phase III study of rigosertib in myelodysplastic syndrome (MDS) in December or the beginning of next year, so it's natural for investors to view the sharp sell off as a sign that negative data may have leaked.

Speculation about the possible failure of the rigosertib MDS study escalated further after Onconova posted a description of a new phase III study in MDS.

It's unlikely Onconova has bad rigostertib data in hand or planned the new study because it believes the current one will fail, so the only thing that's changed with the recent sell off is the risk/reward of being long the stock heading into the data announcement.

An objective look at the new rigosertib study should calm jangled nerves. The new study is designed to enroll only 90 MDS patients, compared to 270 patients in the ongoing study. The FDA and its counterparts in Europe aren't likely to approve a drug based on a study that is smaller than an older one that failed. If Onconova was planning a second pivotal study of rigosertib in MDS, it would more likely enroll a similar number of patients as the current study.

The new study is also described as a phase IIIb, which is different from a phase III study. A phase IIIb is meant to supplement regulatory submissions in an attempt to either expand a drug's label or obtain insurance reimbursement. This is the most likely reason for Onconova to conduct the new rigosertib study. The company noted on their most recent quarterly conference call that the new study is intended to provide patient access to rigosertib after completion of the phase III trial.